Is Account Based Marketing (ABM) Is Right For Your B2B Tech Company?
Selling enterprise B2B technology used to be easier. But in the past few years, sales cycles have become ridiculously long — sometimes stretching to more than twelve months. Often this means deals are lost as buying committee members have moved on, management priorities have shifted, or budgets have been allocated to other faster moving projects.
Traditionally, sales people sell to one contact within a company who then in turn sells the change within their organization. However, selling to one person within a large organization is as risky as it is ineffective because it leaves the internal advocating and selling to that one single contact, creates bottlenecks and misconceptions, and gains traction more slowly.
Rather than pouring all your resources into one person, it would be much more effective to identify multiple individuals in various roles such as executive management, influencers, stakeholders, end users, and even blockers. This way, you can create synergies, have direct conversations with the relevant decision makers, and therefore achieve your sales goals much faster.
This latter multi-person B2B marketing strategy is called "Account Based Marketing".
What Is Account Based Marketing?
HubSpot defines it as a
"growth strategy in which marketing and sales work together to create personalized buying experiences for a select set of high value companies".
While this isn't a new sales strategy, it really has gained in popularity in the past twelve months. In fact, more than 67% of brands are leveraging it in 2020. This boost in popularity is partially due to the fact that adequate tooling is now more accessible to more efficiently manage all the moving parts and complex work streams between teams.
Account Based Marketing is particularly gaining traction within the B2B technology space because it inverts the standard demand generation process as marketers and sales people create a specific approach for each target account.
Side note because this causes some confusion: Account Based Marketing does not replace Inbound Marketing which can be defined as a volume-based approach to attract, convert, close, and delight specific buyer personas. Instead, Inbound Marketing becomes a tool in the ABM tool kit to create a solid foundation for the entire organization as well as support very targeted campaigns.
Now that we briefly reviewed what Account Based Marketing is, let's have a look at which type of B2B technology companies are a great for this strategy. Below, you will find a series of questions to help you determine if ABM is right for you.
#1: Do You Have A Limited Number Of Prospects You Can Sell To?
The first must-have criteria is the number of prospects you could potentially sell to. If you are targeting a very small number of clients (e.g., one of my clients works only with the world's largest food manufacturers and processors), ABM is likely a very successful strategy for you. This could be a small vertical niche (e.g., poultry processing equipment) or organizational size (e.g., only Fortune 500 companies). It is less effective for companies selling to a very large number of customers.
#2: Does Your Product Or Service Require A Considerable Investment?
Next, you should ask yourself if your product or service requires a high enough investment to make ABM a successful strategy for you.
If your average customer is looking to buy 100 licenses at $19/month, ABM isn't a great fit for you. However, if the investment is significant enough that your customers usually consider it extremely carefully and decisions are made by multiple people with different responsibilities, you could see significant benefits with ABM.
#3: Does The Purchase Need Approval From The Finance Department?
Large purchases usually require approval from an internal finance department. If your sales process often gets stuck here or takes significantly longer because of this extra step, Account Based Marketing might be the way to go. The reason for this is simple: rather than letting one prospect work the proposal up the chain and through finance, you connect with and influence as many as 20 different stakeholders within that company. This significantly speeds up the purchase approval process.
#4: Do You Usually Sell To A Buying Committee?
Very large investments usually are made by buying committees. If your sales process gets stuck because of this, ABM could be the right path for you.
Buying committees are usually three or more people from various backgrounds and roles, with different objectives and goals. Selling to them requires a uniquely tailored approach for each committee member. Account Based Marketing helps to assemble the committee and streamline the process significantly.
#5: Are You Trying To Shorten Your Very Long Sales Cycle?
Another good indicator of whether or not pursuing ABM might be worthwhile is the length of your sales cycle. If you are losing a lot of deals because the sales cycle is too long (resulting in buying committee members moving on, management priorities changing, and/or budget being allocated away from this project onto faster moving projects), Account Based Marketing could be the right fit for you.
It allows you to increase your sales velocity because you can better align with your individual stakeholders' goals and objectives — all while increasing your competency and narrowing your focus.
#6: Are You Looking To Close Bigger Deals?
In addition to shortening your sales cycle, it also often results in closing bigger deals. Because you invest, on average, one marketing person and ten sales people to work on 10 target accounts per sales person at a time, it forces you to be more selective about who you pursue in your sales efforts. Because you intentionally focus on the biggest opportunities only, you will close bigger deals as a result.
#7: Relation-Based High Level Of Human Touch
Last, but certainly not least, Account Based Marketing is a great fit for companies whose sales process requires a very high level of relationship building and human touch. Consequently, ABM isn't a good fit for SaaS companies who allow companies to sign up on their website without any sales interaction, but it is a great fit for technology and software solution providers who regularly have a consulting retainer as part of their product sales and build long-term partnerships with their clients.
In summary, Account Based Marketing is a very involved, yet highly effective marketing and sales strategy for organizations who sell products and services requiring larger long-term investments. These organizations also tend to face long sales cycles involving buying committees and finance approvals. If done right, ABM results in faster sales cycles and bigger deals.